TMI Blog2018 (11) TMI 1528X X X X Extracts X X X X X X X X Extracts X X X X ..... required to carry out operations and maintenance of the plant and by way of consideration, UML will pay PIPL the amounts as specified in Schedule 4 of the agreement - After careful consideration of the agreement the Bangalore Bench upheld the demand of service tax under the above category - Since the dispute in the present case is very same, we find no reason to take a different view. Storage and warehousing service - Held that:- After considering the agreement the Bangalore Bench has come to the conclusion that the service rendered by PIPL to UML will not come under storage and warehousing service and accordingly has set aside the demand for service tax - demand set asdie. Penalties set aside. Appeal allowed in part. - Misc. Application (ROA) No.420/2012 And Appeal Nos.ST/155/2007, ST/156 & 157/2007 - FO/76984-76986/2018 - Dated:- 26-11-2018 - Shri P. K. Choudhary, Judicial Member And Shri V. Padmanabhan, Member (Technical) Shri C. Murlidhara, Advocate for the Appellant Shri S.S. Chattopadhyaya, Suptd. (AR) for the Respondent. ORDER Per Bench: The Misc. Application has been filed for restoration of appeal which was dismissed on 13.09.2012 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9. Ld. Advocate submitted that the same dispute with reference to the appellants operations came up before the Bangalore Bench of the Tribunal and was decided vide Final Order No.21485-21490/2018 dated 03.10.2018. The issue came up before the Bangalore Bench since PIPL got themselves registered as with LTU at Bangalore. The dispute in the present appeals is the which was considered by the Bangalore Bench, but for the earlier period. Further submissions of the ld. Advocate is summarized below: i) By relying on the findings of the Bangalore Bench, he submitted that the service of Banking or Financial Service was brought under the tax net w.e.f 16.07.2001. Board has clarified vide their Circular dated 09.07.2001 (issued at the time of including the above service), that the above service will not cover those agreements which were executed prior to 16.07.2001 subject to the further condition that the goods in question have also been received prior to 16.07.2001. He emphasized the fact that the Bangalore Bench has held that since the agreement is dated 11.07.2001 (i.e. prior to 16.07.2001) and the goods have also been received prior to 16.07.2001, there is no liability for service t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lation and permitted UML to use the storage facility subject to Clause-N of the agreement. After considering the agreement the Bangalore Bench has come to the conclusion that the service rendered by PIPL to UML will not come under storage and warehousing service and accordingly has set aside the demand for service tax. Being identical, in the present dispute also we find no reason to take a different view. The detailed finding of the Bangalore Bench are reproduced below leading the conclusions outlined above. 5.1 Coming to the issue No. (i), the learned Commissioner has contended that CBEC vide letter F. No.B-11/1/2001-TRU dt.9.7.2001 clarified that agreements entered before 16.7.2001 will not be liable to service tax provided the property/goods have also been received by the lessee prior to 16.7.2001. The Commissioner contended that the stamp paper on which the said agreement was made was purchased on 4.9.2001 as per the endorsement on the reverse side of the stamp paper. He contended that therefore, by any stretch of imagination, the agreement could not have been concluded before 16.7.2001 and that Shri Asith Gangopadhyaya in his statement dated10.8.2005 ST/496/2008, ST/973/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16.7.2001. (i) Detention Certificate dated 1.2.2001 issued by Inspector of Central Excise, HQrs. Preventive, Jameshedpur. (ii) Letter dated 11/13.7.2001 from Superintendent of Central Excise, Jameshedpur to the appellants for releasing the plant and equipment. 5.1.2 Shri Asith Gangopadhyaya in his statement cited above has also stated that the plant was detained by Excise Officers on 1.2.2001, which was vacated on 13.7.2001. The complete plant was ready for operation from early July itself but could not be commissioned because the plant was under detention. It was ST/496/2008, ST/973/2009, ST/1874/2010, ST/1339/2011, ST/664/2011, ST/2959/2012 14 commissioned after the stay was vacated and hence, the agreement effective from 11.7.2001 was signed. However, the actual signature was taken at a later date. Going by the circumstances of the case, it is evident that the plant was in existence in the premises of M/s. UML well before 16.7.2001. Therefore, in view of the Board Circular cited above, the appellants cannot be charged to pay service tax under the heading Banking and Other Financial Services for leasing of the plant to M/s. UML. 5.1.3. The counsel for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other name, which is usually a percentage of the transaction value. The lease rental or hire purchase amount is recovered in Equated Monthly Installments (EMI) over the period of lease or hire-purchases as indicated in the agreement through post-dated cheques and no separate bills are raised for the monthly recovery. Every agreement bears a unique number. 2.1.3 The EMIs consist of recovery of principal amount (towards the original cost of the equipment) and finance/interest charges. The allocation between the principal and the finance/interest charges are known to and agreed upon by both the parties. The customer repayment schedule contains the details of the EMIs with the break-up for the principal and the interest. In respect of leasing and hire purchase, the amount recovered as principal is not the consideration for services rendered but is credit to the capital account of the lessor/hire-purchase service provider. The interest/finance charges is the Revenue or income and is credited to the Revenue account. Such interest or finance charges together with the lease management fee/processing fee/documentation charges is the consideration for the service rendered and therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... them, they are rendering the services but to themselves. However, in terms of the agreement, we find that the appellants are rendering OM services to the plant which is under lease to M/s. UML. The appellants are also charging M/s. UML for this particular O M services. If it were the case of the appellant that the service rendered was to themselves, there was no need whatsoever for M/s. UML to pay the appellants for O M charges in terms of the agreement. Therefore, we do not find any reason to interfere with the impugned orders as far as demand in respect of Management, Maintenance or Repair Services . 5.3 Coming to the issue of demands under Storage and Warehousing Service , we find that the appellants have entered into an agreement dated 1.8.1999 with M/s. UML. As per the ST/496/2008, ST/973/2009, ST/1874/2010, ST/1339/2011, ST/664/2011, ST/2959/2012 18 agreement, PIPL deliver liquid oxygen into the storage installations and would permit the buyer (UML) to use the storage facility subject to clause 10 of the agreement regarding the use of the installation exclusively by M/s. UML. It is evident that the appellants have not rendered any warehousing services. It is not the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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